What happened:
Recent nightlies introduced a new grey bar at the top of the window, under the tabs and before the actual terminal area starts. This bar reduces the amount of vertical space in the terminal and doesn't seem to do anything.

I have attached a screenshot showing the previous view in iterm2 3.2.5 and the new view with the extraneous gray bar in 3.3 nightlies

iterm 3.2.5, no extraneous bar:

iterm 3.3 nightlies with new empty bar:

What should have happened:
this bar should not show up and reduce vertical space in the terminal pane